FCC Drops a 400 pager for implementing an ‘open internet’ regime

Document Drop: FCC reveals the full text of open Internet rules for net neutrality.

So, not surprisingly, the prospect of a tax increase was a prominent card played by conservatives opposed to net neutrality, the idea of equal treatment for all Internet content. The Federal Communications Commission posted the full text of its open Internet plan online Thursday, putting on full display the agency’s net neutrality ruling approved 3-2 last month. As promised, the rules start by putting net neutrality on the right legal footing, which means they have a much stronger chance of surviving the inevitable legal challenge.

The lengthy, 400-page document, details how the agency reclassifies both wired and mobile broadband Internet as a utility “telecommunications service,” which regulates it similarly to traditional phone lines. The uncertainty in some of the rules, released in full for the first time Thursday, reflects in part the fast-changing nature of the Internet and the agency’s lack of experience in areas that it now has the power to oversee. The order, released Thursday in the wake of the commission’s vote to approve net neutrality rules in late February, establishes “clear and enforceable rules” to protect consumers, an FCC official said. A highly public dispute over network pricing last year helped nudge into the mainstream the debate over net neutrality—the principle that all Internet traffic should be treated equally.

Moreover, even if your monthly bill does rise a few pennies, the money would go toward expanding broadband service nationwide — and that’s a good thing, as just about every study of the economic and social benefits of broadband has shown. While the order is long, the actual changes to the Code of Federal Regulations that the FCC approved amount to eight pages, running from pages 283 to 290 in Appendix A of the order. The full 400 pages of the FCC’s policy and research on net neutrality aren’t exactly beach reading, but the minutia are integral to the rules’ lifespan. But the FCC says in the rules that it won’t be jumping in right away, because it lacks experience in evaluating such deals. “We find that the best approach is to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules,” the commission wrote in the rules. These are the nitpicky things that big cable companies plan to challenge in court, the things that Republicans in Congress will use as ammunition to strip the agency of its power to regulate the internet.

The rules, for example, give the FCC new powers to oversee “interconnection” deals between companies like Netflix Inc. and Internet service providers like Verizon Communications Inc., common arrangements that let companies share network traffic. The FCC order includes a history of net neutrality efforts at the agency as well as a lengthy justification for the rules and an analysis of potential legal issues. We’re still reviewing, but there’s much to appreciate, including bright line rules against blocking, throttling, and paid prioritization of Internet traffic. Their aim is to protect the open Internet, advancing principles of so-called Net neutrality by prohibiting broadband providers from elevating one kind of content over another. The regulator is taking a similarly uncertain stance on sponsored data programs—ones where content companies like Google Inc. could pay the cost of data so their services could be delivered to mobile users free.

The collapse of reasoned discussion about net neutrality into partisan bickering is yet another example of why it’s so hard to get things done in this country. For example, an ISP cannot degrade customers’ access to services that compete with its own offerings and cannot charge tolls to privilege traffic from one web service over others. Critics say such plans give an advantage to deep-pocketed companies that can afford the cost at the expense of startups or other weaker rivals. “Given the unresolved debate concerning the benefits and drawbacks of data allowances and usage-based pricing plans, we decline to make blanket findings about these practices,” the commission said.

The FCC also listened to our advice to forbear from applying numerous aspects of its authority, aspects that are not necessary to address the critical but narrow problems posed by ISP gatekeepers. The new rules could produce tension between the FCC and the Federal Trade Commission, which has historically been charged with protecting consumers’ privacy online. Today’s order creates no new taxes or fees, although there is a possibility those will emerge following subsequent hearings and rulemaking regarding disabilities access or a universal service fund to expand broadband coverage.

With respect to privacy, the FCC is not forbearing from protecting consumer privacy, but wisely will not import existing rules relating to phone service privacy to broadband providers. Some question whether the FCC, which has not requested an increase to its legal budget for next year, has the capacity to manage and adjudicate one-time petitions. Last week, Representative Marsha Blackburn, a Tennessee Republican, introduced a bill in the House, with 19 original cosponsors, to limit the FCC’s authority and undo its new rules.

That bureaucratic distinction gives the commission more authority to ensure that network operators such as Comcast and AT&T aren’t picking online winners and losers. The commission was careful to write its rules so that they wouldn’t quickly become outdated as technologies evolve, said Kevin Werbach, a professor of legal studies at the University of Pennsylvania’s Wharton School who has advised the FCC on open Internet policies. “It’s a reasonable and logical approach given the degree of uncertainty about what is going to happen in the marketplace,” Mr. The document “only confirms our fear that the commission has gone well beyond creating enforceable open Internet rules, and has instead instituted a regulatory regime change for the Internet that will lead to years of litigation, serious collateral consequences for consumers, and ongoing market uncertainty,” the National Cable and Telecommunications Association, a trade group representing large cable providers, said in a statement. The rule does lay out factors that will help guide the analysis of whether a given practice violates the rules, such as the effect on innovation, free expression, and end-user control.

Indeed, today’s order punts many difficult questions to the general conduct rule, which applies whenever conduct doesn’t fall into one of the three categories of blocking, throttling, or paid prioritization, and also applies to all disputes relating to interconnection (ISP deals with other Internet infrastructure companies). The fee — conservatives are calling it a tax — was established in 1997 and raises billions of dollars annually to defray phone companies’ costs for running lines to far-flung areas. The expense and expertise to raise and respond to issues on that basis could tilt the process in favor of big and established players, like major ISPs and content providers. The ticking time bomb for net-neutrality opponents is this line: “Our action today is not intended to prejudge or limit how the commission may proceed in the future.” It’s unclear whether the universal service charge even would be permissible under the Internet Tax Freedom Act.

The commission will address mobile data caps on a case-by-case basis. [Pages 66 to 68.] — So-called specialized services that do not provide Internet access, including some VoIP services, online heart monitors and energy consumption sensors, are not covered by the rules. [Page 11. paragraph 35.] Unfortunately, the FCC has maintained the “lawful content” limitation, and gone farther to state that it does not intend “to prohibit or discourage voluntary practices undertaken to address or mitigate the occurrence of copyright infringement.” The danger of this limitation has already been demonstrated. This is an attempt by federal authorities to protect Internet users from telecom giants that say you can trust them to do what’s right but have a mighty poor track record in that regard. In the case of broadband, however, we all benefit from its expansion by improved commerce, education, healthcare, entertainment, security and a host of other aspects of daily life. While it’s a very good idea for users to protect themselves with such tools, that shouldn’t be their only protection against the very companies they are forced to trust in order to gain access to the Internet – particularly when ISPs like Verizon have gone to extreme measures to circumvent users’ privacy controls.

For example, T-Mobile zero-rates certain music services and Facebook and Wikipedia have a variety of deals around the world creating zero-rated access to their services. We recognize the value of providing low-income users with access to knowledge and the ability to interconnect, but these objectives are better achieved by promoting competition and removing access barriers to neutral Internet access.